US CPI hits a record high of 9.1%, Fed may raise interest rates by 4 points, Biden: Data is outdated and does not reflect recent trends

The U.S. Department of Labor released the Consumer Price Index (CPI) for June on the 13th, showing a year-on-year increase of 9.1%, the largest since the end of 1981, exceeding market expectations of 8.8%. After seasonal adjustments, the monthly growth rate of CPI in June was 1.3%. The core CPI (excluding food and energy) saw a year-on-year increase of 5.9%, higher than the expected 5.7% but slightly lower than May's 6%.

The U.S. Department of Labor released the Consumer Price Index (CPI) for June on the 13th, showing a year-on-year increase of 9.1%, the largest since the end of 1981, exceeding the market's expectation of 8.8%. After seasonal adjustments, the monthly growth rate of CPI in June was 1.3%. The core CPI (excluding food and energy) showed a year-on-year increase of 5.9%, higher than the expected 5.7%, but slightly lower than May's 6%.

The interest rate for exchange contracts linked to the Fed meeting date rose to 2.477%, which is 89.7 basis points higher than the current federal funds rate of 1.58%. Traders of exchange contracts are betting that the probability of a 4-basis-point rate hike by the Fed at the currency policy meeting on July 26th to 27th is over 50%.

The U.S. stock market plunged, with the Dow wiping out gains of over 100 points to close nearly 200 points lower. The S&P 500 and Nasdaq both fell by nearly 1%, with large-cap tech stocks declining for two days, while popular Chinese stocks outperformed the market. The Dow dropped 208.54 points, or 0.67%, to close at 30772.79 points, the S&P 500 fell 17.02 points, or 0.45%, to 3801.78 points, and the Nasdaq dropped 17.15 points, or 0.15%, to 11247.58 points.

International oil prices saw the deepest intraday drop of over 8 dollars or 7%, collectively falling below $100. The U.S. dollar held steady at 108, hitting a new 20-year high, while the euro against the dollar traded near parity for the first time in nearly twenty years. Gold fell for two consecutive days, dropping below $1730.

Despite being on a visit to the Middle East, U.S. President Biden promptly commented on the soaring inflation, stating that although the inflation is unacceptably high, the data is outdated and does not reflect the recent 30-day decline in oil prices. Since mid-June, gasoline prices have fallen by about 40 cents, providing some relief to American households.

Biden mentioned that there may be signs of a slowdown in Core CPI, which has decreased for the third consecutive month, marking the first time it has been below 6% since last year.

While in Israel, one of Biden's objectives was to convince Saudi Arabia and other members of the Organization of the Petroleum Exporting Countries to increase oil production.

In anticipation of the continued high inflation data in June, the White House had predicted a "substantial increase" in the June CPI index a few days ago. Indeed, U.S. gasoline prices have recently fallen, with the average oil price in July down 12% compared to June, indicating that CPI data may slowly decline starting in July.

This article is authorized reprint from Horizon News Network